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Investors file out of risk - EPFR
April 13, 2012 / 6:45 PM / 5 years ago

Investors file out of risk - EPFR

NEW YORK, April 13 (Reuters) - Investors pulled more money out of equity funds in the latest week than any other week this year, and left high-yield bond funds for the first time in 19 weeks, as euro zone concerns reemerged and a weak U.S. jobs report stifled risk appetite, EPFR Global data showed.

Equity funds had total net redemptions of $9.26 billion in the latest week, ended April 11, a year-to-date high, according to Cameron Brandt, director of research for EPFR Global.

U.S. equity funds alone posted redemptions of $6.51 billion, a 20-week high, while redemptions from European equity funds were $1.19 billion.

Investors also fled risky bonds. High-yield “junk” bond funds ended their 18-week run of inflows with redemptions of $1.41 billion, while emerging market debt funds had their first redemptions since early January - $99 million - Brandt said.

Emerging market equity funds had redemptions of $859 million, which he said was the biggest weekly outflow since mid-December.

News of a disappointing debt auction in Spain, weak U.S. jobs growth and concerns about a slowdown in China dragged down equities during a week in which the S&P 500 fell 2.1 percent.

“The tone of the market has changed in the past week and a half from really overwhelming good news to somewhat mixed news, and that means a higher level of risk,” said Tim Ghriskey, chief investment officer of Solaris Asset Management.

Bond funds gained a net $2 billion in the week, their smallest weekly inflows of the year, Brandt said. U.S. bond funds had $1.9 billion of the total inflows.

“Bonds are overvalued -- they’re not cheap by any measure,” said Kenny Landgraf, head of Kenjol Capital Management.

Money-market funds had redemptions of $1.7 billion, an improvement from outflows of $14.73 billion the previous week.


China equity funds had redemptions of $243 million, the biggest outflows among the BRIC nations. A decline in crude oil imports in the country stoked concerns about slowing growth.

“The slowdown has been a bit more pronounced than expectations,” said Ghriskey of Solaris.

All sector-specific funds had outflows, with commodities posting the highest redemptions, $623 million, compared with inflows of $247 million in the previous week.

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